On Tuesday, Sept. 12, electronics retailer Best Buy (NYSE:BBY) released Q2 2006 earnings for the period ended Aug. 26, 2006.
- Respectable sales growth plus expanding net margin plus significant share buybacks equals a happy EPS figure, and Best Buy delivered on all of these fronts.
- The company is changing its product mix to focus more on home theater systems. Stocking up on big-ticket items like plasma TVs and surround-sound systems explains some of the disproportionate rise in inventories.
- For the second quarter in a row, the analyst community was caught flat-footed by Best Buy's excellent performance. If the company can keep this up through the crucial holiday season, investors will have plenty to celebrate come next February.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q2 2006 |
Q2 2005 |
Change | |
|---|---|---|---|---|
|
Sales |
$7,550 |
$7,603 |
$6,702 |
13.4% |
|
Net Profit |
-- |
$230 |
$188 |
22.3% |
|
EPS |
$0.44 |
$0.47 |
$0.37 |
27% |
|
Diluted Shares |
497 |
509 |
(2.5%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q2 2006 |
Q2 2005 |
Change* | |
|---|---|---|---|
|
Gross Margin |
25.02% |
25.53% |
(0.51) |
|
Operating Margin |
4.34% |
3.89% |
0.45 |
|
Net Margin |
3.03% |
2.81% |
0.22 |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q2 2006 |
Q2 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$2,687 |
$2,825 |
(4.9%) |
|
Accounts Rec. |
$483 |
$389 |
24.2% |
|
Inventory |
$4,049 |
$3,250 |
24.6% |
|
Liabilities |
Q2 2006 |
Q2 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$3,877 |
$2,760 |
40.5% |
|
Long-Term Debt* |
$527 |
$552 |
(4.5%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
The company declined to provide this essential piece of the puzzle.
Find out why Fools always follow the money.
Related Companies:
- Circuit City Stores (NYSE:CC)
- RadioShack (NYSE:RSH)
- Staples (NASDAQ:SPLS)
- Sears (NASDAQ:SHLD)
- Amazon.com (NASDAQ:AMZN)
- Apple Computer (NASDAQ:AAPL)
For related Foolishness:
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At the time of publication, Anders Bylund held no position in any company mentioned. Fool rules are here.
